5.             DELEGATION OF AUTHORITY – CONTRACTS AWARDED FOR THE PERIOD JANUARY 1 TO MARCH 31, 2008, AND LEGAL OUTSOURCING COSTS

 

DÉLÉGATION DE POUVOIR – CONTRATS ACCORDÉS POUR LA PÉRIODE DU 1er JANVIER AU 31 MARS 2008, ET FRAIS LÉGAUX D’IMPARTITION

 

 

 

Committee Recommendation

 

That Council receive this report for information. 

 

 

Recommandation du comité

 

Que le Conseil municipal prenne connaissance de ce rapport.

 

 

 

Documentation

 

1.   City Treasurer’s report dated 06 June 2008 (ACS2008-CMR-FIN-0030).

 

Report to/Rapport au:

 

Corporate Services and Economic Development Committee/

Comité des services organisationels et du développement économique

 

and Council/et au Conseil

 

06 June 2008/le 6 juin 2008

 

Submitted by/Soumis par : Marian Simulik, City Treasurer/Trésorière municipale

 

Contact/Personne-ressource :  Phil Andrews, Manager, Supply Management Division / gestionnaire par interim, Division de la gestion de l'approvisionnement,
(613) 580-2424 ext./poste 25176; Phil.Andrews@ottawa.ca

 

 City-wide / À l’échelle de la ville

Ref N° ACS2008-CMR-FIN-0030

 

SUBJECT:     DELEGATION OF AUTHORITY – CONTRACTS AWARDED FOR THE PERIOD JANUARY 1 TO MARCH 31, 2008, AND LEGAL OUTSOURCING COSTS

 

OBJET :         DÉLÉGATION DE POUVOIR – CONTRATS ACCORDÉS POUR LA PÉRIODE DU 1er JANVIER AU 31 MARS 2008, ET FRAIS LÉGAUX D’IMPARTITION

 

 

REPORT RECOMMENDATION

 

That the Corporate Services and Economic Development Committee receive and discuss this report and then forwarded to Council for information.

 

 

RECOMMANDATION DU RAPPORT

 

Que le Comité des services organisationnels et du développement économique discute de ce rapport puis le transmette au Conseil municipal pour information.

 

 

BACKGROUND

 

On 28 November 2007, City Council amended the Purchasing By-Law to include a requirement to identify professional and consulting contracts in the quarterly reports, rather than the previous format, which required that that information be reported only annually.  In addition to the more timely information, Council is also provided with enhanced detail in terms of the reasons for outsourcing.

 

The amended Purchasing by-law provides that the quarterly report: 

 

1.      contain information on contracts exceeding $25,000 awarded under delegated authority;

 

2.      identify all contracts categorized as:

 

(a)    Consulting Services

(b)   Professional Services

(c)    Follow-on Contracts

(d)   Amendments  

 

3.      identify the reason for outsourcing in accordance with the definitions discussed below.

 

In addition to the above, this report includes Legal Outsourcing Costs for the first quarter and is listed in Document 2.

 

 

DISCUSSION

 

Document 1

 

The contracts approved for the period of January 1 to March 31, 2008 are listed in Document 1.

 

Where appropriate, staff used the following definitions as outlined in the Purchasing By-law to identify the contract category, the outsourcing reason and the non-competitive exception.  

 

Professional Services

 

Professional Services means services requiring the skills of professionals for a defined service requirement or for a specific project related deliverable including but not limited to the areas of engineering, architecture, design, planning, information technology, financial auditing and fairness commissioners;

 

Consulting Services

 

Consulting Services means assistance to management, including but not limited to the areas of strategic analysis, organizational design, change management, policy development, feasibility studies and other services intended to assist decision making within the organization.

 

Amendment

 

An amendment is an increase in the scope of an approved contract, which is unanticipated.  Those amendments that are both greater than $50,000 and 50% of the original contract will be identified in the quarterly report. 

 

Follow-on Contract

 

A follow-on contract differs from an amendment in that the original contract or bid solicitation document recognizes the fact that it is likely that the initial defined contract scope may be expanded to include a number of related phases that are either included in the tender document, or are customary in relation to the work assignment. Rates charged for the follow-on contract are reviewed by Supply Management Division, and must be based on those rates proposed by the service provider in the original competitive “bid”.

 

An extension to a contract is not categorized as an amendment or a follow-on contract.  An extension is a contract term allowing the City to continue purchasing the good or service for an extended period of time where the option to extend the contract was outlined in the bid document. 

 

Reasons for Outsourcing the Work:

 

(a)        workload related or lack of internal resources by a “W”;

(b)               need for specialized expertise by an “E”;

(c)                need for independent third party oversight by an “I”;

(d)               regulatory requirement by an “R”;

(e)                proprietary service or unique market position by a “P”; and

(f)         business model required outsourcing by an “O”.

 

 

Non-Competitive Purchases

Under Section 22(1) of the Purchasing By-law the requirement for competitive bid solicitation for goods, services and construction may be waived under joint authority of the appropriate Director and Supply Management and replaced with negotiations by the Director and Supply Management under the following circumstances:

  1. where competition is precluded due to the application of any Act or legislation or because of the existence of patent rights, copyrights, technical secrets or controls of raw material,
  2. where due to abnormal market conditions, the goods, services or construction required are in short supply,
  3. where only one source of supply would be acceptable and cost effective,
  4. where there is an absence of competition for technical or other reasons and the goods, services or construction can only be supplied by a particular supplier and no alternative exists,
  5. where the nature of the requirement is such that it would not be in the public interest to solicit competitive bids as in the case of security or confidentiality matters,
  6. where in the event of a "Special Circumstance" as defined by this By-law, a requirement exists, or
  7. where the possibility of a follow-on contract was identified in the original bid solicitation.
  8. where the total estimated project cost for professional services does not exceed $50,000.
  9.  where the requirement is for a utility for which there exists a monopoly.

 

This report identifies all non-competitive purchases as well as references the appropriate paragraph 22(1) exception.

 

Supply Management Division certifies that all the contracts awarded under Delegation of Authority for the period of January 1 to March 31, 2008, are in compliance with the Purchasing By-law.

 

The following table summarizes the total number and value of the contracts as well as the different categories under which the applicable contracts fall.

 

 

Total # of Contracts

Total $ Value

# Prof. Services

# Consulting
Services

Workload
related "W"

Specialized
expertise "E"

Independent third party oversight "I"

Regulatory
Requirement "R"

Proprietary
Service "P"

Business model outsourcing "O"

 

AG

5

331,668

4

1

 

1

4

 

 

 

CMO

30

19,573,720

3

 

 

1

 

 

2

 

BTS

166

21,101,193

46

2

1

16

 

1

12

18

CPS

34

5,074,565

4

3

 

7

 

 

 

 

PWS

227

68,973,243

70

4

 

9

1

 

 

64

PTE

13

1,292,622

8

2

 

6

 

 

 

4

Total

475

116,347,011

135

12

1

40

5

1

14

86

 

Document 2

 

Legal costs paid for the period January 1 to March 31, 2008 are listed in Document 2.

 

Previously, these amounts were reported annually as directed by Sections 13(1) and (2) of the Purchasing By-law.  To be consistent with past reporting practices, only the "legal fee" portion of the costs were reported where the total met or exceeded the $100K threshold.

 

In this first Quarterly Report, the Legal Services Branch has amended the previous approach to enable a more comprehensive disclosure such that Document 2 includes:

 

 

 

CONSULTATION

 

The Purchasing By-law requires the preparation of this report and as such no public consultation is required.

 

 

FINANCIAL IMPLICATIONS

 

Prior to a contract approval, Supply Management Division staff confirms that the appropriate funds are available in the budget, based on receipt of a funded requisition in SAP.  The availability of funds is a condition of approval under delegated authority.

 

 

SUPPORTING DOCUMENTATION

 

Document 1 -      List of Contracts Awarded under the Purchasing By-law for the period January 1 to March 31, 2008 (Issued separately and held on file with the City Clerk)

 

Document 2 -      Legal Outsourcing Costs for the period January 1 to March 31, 2008 (Issued separately and held on file with the City Clerk)

 

 

DISPOSITION

 

Report forwarded for information pursuant to the By-law.  No further action required.